In-Fusio sues Microsoft over mobile 'Halo'

In-Fusio announced at the 2005 CTIA IT Wireless and Entertainment trade show that it would bring the blockbuster sci-fi shooter franchise to mobile phones as part of an exclusive three-year deal with Microsoft.

More than a year after the initial agreement and with no Halo game available for mobile phones, In-Fusio filed suit against Microsoft in U.S. District Court in Seattle last month, charging the company with refusing to approve game designs while still demanding payment for an exclusive license.

"In the last 11 months, Microsoft has approved no fully developed In-Fusio Halo game designs, ignoring and then refusing to accept In-Fusio's game design concepts with little or no explanation and leaving In-Fusio little basis to revise its concepts to obtain Microsoft's approval," the suit reads.

Microsoft approved the first project under the agreement, Halo Portal, an application that lets users download Halo ring tones and wallpaper to their mobile phones. However, when the company turned its efforts toward creating an actual Halo game for the mobile marketplace, it claims Microsoft stonewalled it, refusing to approve no fewer than four game design concepts between February and September of 2006 and not offering explanations for the rejections.

According to the suit, the original agreement called for In-Fusio to pay Microsoft guaranteed minimum royalties of $2 million, spread out in $500,000 payments between January 1, 2006, and June 1, 2008. After rejecting In-Fusio's designs, Microsoft agreed to delay the payment schedule "pending efforts to agree on acceptable Halo design concepts," the suit reads.

However, In-Fusio claims that last November, Microsoft sent notice that it would terminate the contract unless In-Fusio made its delayed payment of $500,000 within 30 days. The developer says it believes Microsoft could not terminate the contract, stating that the publisher was already in breach of the agreement for unreasonably rejecting its game designs without explanation.

As a result, In-Fusio seeks judgment to retain exclusive rights to Halo on mobile phones for an extended period to be determined at trial and that Microsoft has waived its right to review and approve In-Fusio's Halo products as a result of its refusal to approve the concepts. In-Fusio is also seeking a cumulative amount of no less than $10 million in damages for breaches of contract and covenant of good faith, as well as legal fees.

In-Fusio has had a publishing relationship with Microsoft since 2004 and has previously published mobile versions of games including Midtown Madness 3, Zoo Tycoon 2, Age of Empires 2, Banjo-Kazooie, Sabre Wulf and It's Mr. Pants.

A Microsoft representative declined to comment on the lawsuit.

Brendan Sinclair reported for GameSpot.